Bank of Canada Increased Interest Rate to 3.75%

This week we discuss our ever changing market and interest rate jumps,  you can depend on us for everything you need to know and how these changes might affect you.

We also invite you to soak up some knowledge and attend our First Time Home Buyers seminar. Over the years, we've answered countless queries from our first time home buyers. If you are in the same boat, please do not hesitate to join in us for this informative opportunity. Scroll down for more info!

Don't miss out on our new and exciting properties listed below. This week we highlight our luxury listing as well as a fantastic family home. Also, take a look at Tsawwassen’s newest development located by Boundary Bay amongst Prado Cafe and the new Four Winds restaurant.

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Weekly Mortgage Rate Update

*2 year fixed @ 4.79%

*3 year fixed @ 5.04%

*4 year fixed @ 5.09%

*5 year fixed @ 4.79%

*Variable Rate Mortgage 4.55%  @ prime -.90% prime rate is 5.45%

*OAC, rates high ratio purchases, subject to certain conditions, rates may change without notice, call for a quote

Bank of Canada Increased Interest Rate to 3.75%

Today, the Bank of Canada increased its overnight benchmark interest rate 50 basis point to 3.75% from 3.25% in September. This is the sixth time this year that the Bank has tightened money supply to quell inflation, so far with limited results.

Some economists had assumed the increase this time around would be higher, but the BoC decided differently based on its expert economic analysis. We summarize the Bank’s observations below, including its all-important outlook:

Inflation at home and abroad

Inflation around the world remains high and broadly based reflecting the strength of the global recovery from the pandemic, a series of global supply disruptions, and elevated commodity prices

Energy prices particularly have inflated due to Russia’s attack on Ukraine

The strength of the US dollar is adding to inflationary pressures in many countries

In Canada, two-thirds of Consumer Price Index (CPI) components increased more than 5% over the past year

Near-term inflation expectations remain high, increasing the risk that elevated inflation becomes entrenched

Economic performance at home and abroad

Tighter monetary policies aimed at controlling inflation are weighing on economic activity around the world

In Canada, the economy continues to operate in excess demand and labour markets remain tight while Canadian demand for goods and services is “still running ahead of the economy’s ability to supply them,” putting upward pressure on domestic inflation

Canadian businesses continue to report widespread labour shortages and, with the full reopening of the economy, strong demand has led to a sharp rise in the price of services

Domestic economic growth is “expected to stall” through the end of this year and the first half of next year as the effects of higher interest rates spread through the economy

The Bank projects GDP growth will slow from 3.25% this year to just under 1% next year and 2% in 2024

In the United States, labour markets remain “very tight” even as restrictive financial conditions are slowing economic activity

The Bank projects no growth in the US economy “through most of next year”

In the euro area, the economy is forecast to contract in the quarters ahead, largely due to acute energy shortages

China’s economy appears to have picked up after the recent round of pandemic lockdowns, “although ongoing challenges related to its property market will continue to weigh on growth”

The Bank projects global economic growth will slow from 3% in 2022 to about 1.5% in 2023, and then pick back up to roughly 2.5% in 2024 – a slower pace than was projected in the Bank’s July Monetary Policy Report

Canadian housing market

The effects of recent policy rate increases by the Bank are becoming evident in interest-sensitive areas of the economy including housing

Housing activity has “retreated sharply,” and spending by households and businesses is softening

Outlook

The Bank noted that its “preferred measures of core inflation” are not yet showing “meaningful evidence that underlying price pressures are easing.” It did however offer the observation that CPI inflation is projected to move down to about 3% by the end of 2023, and then return to its 2% target by the end of 2024. This presumably would be achieved as “higher interest rates help rebalance demand and supply, price pressures from global supply chain disruptions fade and the past effects of higher commodity prices dissipate.”

As a consequence of elevated inflation and current inflation expectations, as well as ongoing demand pressures in the economy, the Bank’s Governing Council said to expect that “the policy interest rate will need to rise further.”

The level of such future rate increases will be influenced by the Bank’s assessments of “how tighter monetary policy is working to slow demand, how supply challenges are resolving, and how inflation and inflation expectations are responding.”

In case there was any doubt, the Bank also reiterated its “resolute commitment” to restore price stability for Canadians and said it will continue to take action as required to achieve its 2% inflation target.

December 7, 2022 is the BoC’s next scheduled policy interest rate announcement. First National will follow the Bank’s commentary and outlook closely and provide an executive summary on our website the same day. For other capital market insights, please visit the Resources page of our website on a regular basis.

Source: First National Financial

First Time Home Buyers Seminar

Are you looking into getting in the market? Do you have questions? Please join us to get all the information you need to make an informed purchase. There are many steps to buying your first home some of which can be quite intimidating. We'd like to walk you through, step by step, to provide a better understanding of the process and answer any questions you have. Please join us for our very informative seminar for First Time Home Buyers. The seminar will be held at our office in Cloverdale and typically runs for two hours, refreshments provided. Spots are filling up fast!

If you or someone you know is interested in attending our seminar, please contact our office to enroll today!

Listings

24439 56th Avenue, Langley | R2732348

5,049 SQ. FT. HOME | 22,732 SQ. FT. LOT

7 BED | 4 BATH

$3,295,000

Custom built and privately situated on a 22,732sqft lot in the heart of Salmon River. Vaulted ceilings and spacious layout with abundant windows flowing with sunlight. This stunning 5,049sqft residence offers 3 bedrooms on the upper level, a junior master on the main level, plus a legal 2-bedroom suite above the 3-car garage. Oversize patio doors provide indoor/outdoor living to your private 484sqft covered deck and sprawling yard. The living space continues to the lower level with rec room featuring builtin theatre with 110’ screed and 9.2 surround sound. Custom cabinets throughout, engineered hardwood floors, quartz counters, Bosch appliances with dual fuel gas range. Detached shop w/100amp panel, 4-piece washroom and roughed in kitchen, fire pit w/gas rough in, and 8-person hot tub.

13068 64A Avenue, Surrey | R2719669

2,215 SQ. FT. HOME | 9,599 SQ. FT.

5 BED | 3 BATH

$1,750,000

Renovated family home situated on a large private lot in a quiet cul-de-sac w/mountain views. Huge South facing back yard perfect for entertaining & kids play. Back lane access w/gated driveway provide extra room for your toys. Double extra wide attached garage & parking for 5 cars on front driveway! Beautifully landscaped yard w/new fencing, stoned patio & large deck for outdoor living. Open Living/Dining, Kitchen w/pantry & eating nook, large master w/ensuite & 2 more bedrooms on the upper floor. Situated below a walk out basement w/theatre, office/bedroom & a full bath. Can easily be re-configured into a 1 or 2 BDRM suite w/separate entry. New 96 efficiency furnace, upgraded windows, doors, LED Lights & smart home integration. Walk to École Panorama Ridge Secondary & Elementary School.

New Construction

6388 Maket Ave, Tsawwassen

1 Bed Garden Flats

2 & 3 Bed Townhomes

Everything you love about urban living and everything you crave about the countryside. Live steps from espressos and cortados, and right next door to Four Winds craft beer. Yet the seashore is just a short walk away. Garden flats and townhomes frame a lush courtyard. Pop out to meet friends for a pint or a meal. Then come home to the tranquility of your private patio or balcony.